Could a nonresident military automobile buyer's South Carolina Form ST-178 exemption certificate be dated before the sale, or did it have to be dated after the sale?

Plain-English summary

South Carolina Private Letter Ruling 89-9 said a nonresident military automobile buyer's Form ST-178 exemption certificate could be dated before or after the sale. The acceptable window included the sale date, the 10 days before it, and the 10 days after it.

The ruling interpreted section 12-35-550(25), which required the seller to receive, “within ten days of the sale or purchase,” a statement from a commissioned officer who outranked the buyer. The statement had to certify that the buyer was an active-duty Armed Forces member domiciled in or residing in another state.

The Department rejected an after-the-sale-only reading. It concluded that allowing certificates from either side of the sale date produced a reasonable and convenient application of the statute, including weekend or holiday vehicle purchases.

Facts that mattered

• XYZ, Inc. was a motor vehicle dealership in South Carolina.
• Military customers sometimes presented Form ST-178 signed and dated by an appropriate officer before the sale.
• The situation commonly arose when an automobile was purchased on a weekend or holiday.
• The dealer was concerned that an audit might disallow a certificate merely because it was dated before the sale.

What this means for you

Automobile dealers

Under the statute analyzed in this 1989 ruling, a qualifying Form ST-178 did not have to be signed after the vehicle sale. A certificate dated within the preceding 10 days was timely, as was one dated on the sale date or within the following 10 days.

Military buyers

The ruling addressed only the certificate's timing. The statutory exemption still required the purchaser to be on active duty, domiciled in or a resident of another state, and located in South Carolina because of Armed Forces orders.

Accountants and tax professionals

The decision turned on the phrase “within ten days.” The Department used ordinary-meaning and statutory-construction principles to read the period as extending both before and after the sale date, rather than only after it.

Common questions

Q: Could Form ST-178 be dated before the automobile sale?

A: Yes. The ruling allowed a date within the 10-day period before the sale.

Q: Was the sale date itself acceptable?

A: Yes. The ruling expressly included the sale date.

Q: How long after the sale could the certificate be dated?

A: The ruling allowed a date within the 10-day period after the sale.

Q: Did PLR 89-9 eliminate the other exemption requirements?

A: No. It decided only the timing question. The quoted statute separately required certification by a higher-ranking commissioned officer and specified the buyer's active-duty, domicile or residence, and South Carolina-location conditions.

Q: Can a current dealer rely on PLR 89-9?

A: No. The ruling says it applied only to the requesting taxpayer's facts, had no precedential value, and was not intended for general distribution. It also applied statutes cited as in effect in 1989.

Citations and references

• S.C. Code section 12-35-550(25) (Supp. 1988) — exemption and certificate-timing language analyzed
• S.C. Code section 12-3-170 (1976) and SC Revenue Procedure 87-3 — PLR authority cited
• Hughes v. Edwards, 265 S.C. 529, 220 S.E.2d 231 (1975), and Investors Premium Corp. v. South Carolina Tax Commission, 260 S.C. 13, 193 S.E.2d 642 (1973) — ordinary meaning of statutory words
• Mitchell v. Mitchell, 266 S.C. 196, 222 S.E.2d 217 (1976), and Green v. Zimmerman, 269 S.C. 535, 238 S.E.2d 323 (1977) — literal application of clear statutory language
• Hay v. South Carolina Tax Commission, 273 S.C. 269, 255 S.E.2d 837 (1979); Fennell v. South Carolina Tax Commission, 233 S.C. 43, 103 S.E.2d 424 (1958); and Etiwan Fertilizer Co. v. South Carolina Tax Commission, 217 S.C. 484, 60 S.E.2d 682 (1950) — dictionary use

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/PLR89-9.pdf

Original ruling text

SC PRIVATE LETTER RULING #89-9

TO:

XYZ, Inc.

SUBJECT:

Nonresident Military Tax Exemption Certificates
Form ST-178
(Sales and Use Tax)

REFERENCE:

S.C. Code Ann. Section 12-35-550(25) (Supp. 1988)

AUTHORITY:

S.C. Code Ann. Section 12-3-170 (1976)
SC Revenue Procedure #87-3

SCOPE:

A Private Letter Ruling is a temporary document issued to a taxpayer, upon
request, and it applies only to the specific facts or circumstances related in the
request. Private Letter Rulings have no precedential value and are not
intended for general distribution.

Question:
Pursuant to Code Section 12-35-550(25), are so-called "Nonresident Military Tax Exemption
Certificates" acceptable if dated within the 10-day period prior to the sale date, or does the 10day period apply only to the 10 days after the sale date?
Facts:
XYZ, Inc. is a motor vehicle dealership located in South Carolina. From time to time, military
customers will present Nonresident Military Tax Exemption Certificates (Form ST-178) which
have been signed and dated by an appropriate officer prior to the date of sale. This situation
commonly arises when an individual is purchasing an automobile on the weekend or holiday.
The taxpayer is concerned that, upon audit, such predated certificates will be disallowed.
Code Section 12-35-550(25), which concerns sales of automobiles to non-resident military
personnel, exempts from the tax:
The gross proceeds of the sale of automobiles or motor bikes to a person domiciled in or
resident of another state, who is located within South Carolina by reason of orders of the
Armed Forces of the United States. This claim for exemption is allowed only if within
ten days of the sale or purchase a statement is furnished the vendor from a commissioned

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officer of the Armed Forces of a higher rank than the purchaser certifying that the person
claiming the exemption is a member of the Armed Forces on active duty and is domiciled
in or a resident of another state (emphasis added).
The underlined portion of the code section is in question.
Discussion:
To answer the question at hand, the meaning of the word "within" must be determined.
One of the primary rules of statutory construction is that words used in a statute should be taken
in their ordinary and popular meaning, unless there is something in the statute which requires a
different interpretation. Hughes v. Edwards, 265 S.C. 529, 220 S.E. 2d 231 (1975); Investors
Premimum Corp. v. South Carolina Tax Commission, 260 S.C. 13, 193 S.E. 2d 642 (1973).
Also, where the terms of a statute are clear and unambiguous and leave no room for construction,
they must be applied according to their literal meaning. Mitchell v. Mitchell, 266 S.C. 196, 222
S.E. 2d 217 (1976); Green v. Zimmerman, 269 S.C. 535, 238 S.E. 2d 323 (1977).
It is an accepted practice in South Carolina to resort to the dictionary to determine the literal
meaning of words used in statutes. For cases where this has been done, see Hay v. South
Carolina Tax Commission, 273 SC 269, 255 S.E. 2d 837 (1979); Fennell v. South Carolina Tax
Commission, 233 S.C. 43, 103 S.E. 2d 424 (1958); Etiwan Fertilizer Co. v. South Carolina Tax
Commission, 217 SC 484, 60 S.E. 2d 682 (1950).
Black's Law Dictionary, Fifth Edition, defines "within", in part, as:
When used relative to time, [within] has been defined variously as meaning any time
before; at or before, at the end of; before the expiration of; not beyond; not exceeding;
not later than. Glenn v. Garrett, Tex. Cir. App., 84 S.W.2d 515, 516.
To determine which meaning is applicable, in this instance, other rules of statutory construction
must also be considered.
The following quotes are from 73 Am. Jur. 2d Statutes:
Section 258. It is generally regarded as permissible to consider the consequences of a
proposed interpretation of a statute, where the act is ambiguous in terms and fairly
susceptible of two constructions. Under such circumstances, it is presumed that
undesirable consequences were not intended; to the contrary, it is presumed that the
statute was intended to have the most beneficial operation that the language permits. It is
accordingly a reasonable and safe rule of construction to resolve any ambiguity in a
statute in favor of a beneficial operation of the law, and a construction of which the
statute is fairly susceptible is favored, which will avoid all objectionable, mischievous,
indefensible, wrongful, evil, and injurious consequences.

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Section 262. It is not to be presumed that the legislature intended to establish a rule
attended with inconvenience, and where a statute is ambiguous and susceptible of two
constructions, convenience may be taken into consideration in the interpretation thereof.
Moreover, a construction of an ambiguous statute so as to produce convenient results is
favored.
Section 265. A statute subject to interpretation is presumed not to have been intended to
produce absurd consequences, but to have the most reasonable operation that its language
permits. If possible, doubtful provisions should be given a reasonable, rational, sensible,
and intelligent construction. These rules prevail where they are not restrained by the
clear language of the statute. Under this rule, general terms in a statute should be so
limited in their application as not to lead to absurd consequences.
Conclusion:
"Nonresident Military Tax Exemption Certificates" (ST-178's) may be dated the sale date, within
the 10-day period prior to the sale date, or within the 10-day period after the sale date.

SOUTH CAROLINA TAX COMMISSION
s/S. Hunter Howard, Jr.
S. Hunter Howard, Jr., Chairman
s/A. Crawford Clarkson Jr.
A. Crawford Clarkson, Jr., Commissioner
s/T. R. McConnell
T. R. McConnell, Commissioner

Columbia, South Carolina
May 3
, 1989

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